There are several ways for orthopedic practices to expand within their community and maintain profitability in today's tough healthcare environment. Todd Albert, MD, spine surgeon and president of Rothman Institute in Philadelphia, discusses six ways for large orthopedic practices to maintain profitability.
1. Find a central location and branch out satellite practices from there. If you are looking to remain competitive in a metropolitan area, construct the flagship practice in a central location and then build satellite practices out into the suburbs or surrounding areas. Rothman Institute has its central practice in Philadelphia and has satellite locations in the suburbs, Atlantic City area and New Jersey. Having several locations around the area is more convenient for patients because they can visit the practice closest to them instead of traveling several miles into the city or central location for their visits, says Dr. Albert. "In the past, a practice could just be great and patients would come to see them," he says. "That doesn't work anymore. We keep growing our patient base as we reach out geographically."
When adding a new location, the physician mix should include both experienced and new physicians. The experienced physicians bring an established reputation and patient base to the practice. The junior physicians stand to learn from their experienced partners, which grows the company as a whole. Additionally, having a widespread geographic reach brings additional negotiating power with health systems and insurance companies. "The patients want our brand, so health systems and insurance companies want to have our brand in their network," he says.
2. Keep lines of communication steady between practices. When there are several practice locations around the area, it's difficult for the physicians and leaders to see each other and manage the practice hands-on. "We have a lot of meetings and video conferencing and we do a lot to maintain the culture, which is really important," says Dr. Albert. "But you've also got to have a really great managerial staff." Rothman Institute has created several divisions within the company and appointed a chairman for each division. Dr. Albert has close communication with division chairmen and trusts them as leaders among other practice physicians.
3. Run a lean organization. Cost-effective orthopedic practices often employ lean management tactics, which means having only enough resources to run the practice. For example, Rothman Institute makes sure all its space is revenue generating space. "We don't have a lot of empty offices," says Dr. Albert. Instead, the space is used for clinical purposes or business functions. The practice also employs a minimum number of full-time employees with each physician to keep costs low but still ensure patient comfort and practice efficiency.
4. Include ancillary services for increased revenue. Orthopedic practices can provide ancillary services, such as injections, radiologic studies and orthotics to increase practice profits. The increased revenue from these services has allowed Rothman Institute physicians to pursue academic endeavors, which is an important part of the practice's mission, says Dr. Albert. The ancillary revenue also provides an extra layer of protection against downgrades in the insurance markets. When reimbursements decline, these services can help support the continuation of the practice.
5. Build a reputation within the community and nationally. Rothman Institute sets aside resources for a significant marketing budget. "When we go into different communities or enter into alliances with health systems and hospitals, we want people to know we are there," says Dr. Albert. "It's helpful to have the brand circulated in the media, such as in newspapers or on the Internet." He also encourages Rothman Institute physicians to hold educational events and attend community events to spread practice awareness.
Beyond marketing to the patient base, it's also important for physicians to be recognized by their peers. One way to accomplish this is by engaging in academic research, publishing papers and attending professional conferences and meetings. "We think it's really important for our physicians to be as academic as possible," says Dr. Albert. "Our physicians speak nationally to other professionals. It helps differentiate our center as having really good surgeons who are also academically interested and full of knowledge about orthopedics."
6. Strategically recruit new physicians. Recruiting new physician partners from channels you know will provide you with the best quality physicians. If you participate in a fellowship program, recruit those physicians after they complete their training. You can also look outward for physicians with great reputations, such as those who already have busy practices in the community, or other academically oriented physicians from around the country. Search for physicians who trained in great programs, says Dr. Albert, and make sure they will fit with the practice's goals and values.
Learn more about Rothman Institute.
Read other coverage on orthopedic practice management:
- 4 Tactics to Maximize Orthopedic Practice Profits
- 6 Best Practices to Create a Thriving Orthopedic Practice
- 6 Challenges for Orthopedic Physician Practice Leaders and How to Overcome Them
1. Find a central location and branch out satellite practices from there. If you are looking to remain competitive in a metropolitan area, construct the flagship practice in a central location and then build satellite practices out into the suburbs or surrounding areas. Rothman Institute has its central practice in Philadelphia and has satellite locations in the suburbs, Atlantic City area and New Jersey. Having several locations around the area is more convenient for patients because they can visit the practice closest to them instead of traveling several miles into the city or central location for their visits, says Dr. Albert. "In the past, a practice could just be great and patients would come to see them," he says. "That doesn't work anymore. We keep growing our patient base as we reach out geographically."
When adding a new location, the physician mix should include both experienced and new physicians. The experienced physicians bring an established reputation and patient base to the practice. The junior physicians stand to learn from their experienced partners, which grows the company as a whole. Additionally, having a widespread geographic reach brings additional negotiating power with health systems and insurance companies. "The patients want our brand, so health systems and insurance companies want to have our brand in their network," he says.
2. Keep lines of communication steady between practices. When there are several practice locations around the area, it's difficult for the physicians and leaders to see each other and manage the practice hands-on. "We have a lot of meetings and video conferencing and we do a lot to maintain the culture, which is really important," says Dr. Albert. "But you've also got to have a really great managerial staff." Rothman Institute has created several divisions within the company and appointed a chairman for each division. Dr. Albert has close communication with division chairmen and trusts them as leaders among other practice physicians.
3. Run a lean organization. Cost-effective orthopedic practices often employ lean management tactics, which means having only enough resources to run the practice. For example, Rothman Institute makes sure all its space is revenue generating space. "We don't have a lot of empty offices," says Dr. Albert. Instead, the space is used for clinical purposes or business functions. The practice also employs a minimum number of full-time employees with each physician to keep costs low but still ensure patient comfort and practice efficiency.
4. Include ancillary services for increased revenue. Orthopedic practices can provide ancillary services, such as injections, radiologic studies and orthotics to increase practice profits. The increased revenue from these services has allowed Rothman Institute physicians to pursue academic endeavors, which is an important part of the practice's mission, says Dr. Albert. The ancillary revenue also provides an extra layer of protection against downgrades in the insurance markets. When reimbursements decline, these services can help support the continuation of the practice.
5. Build a reputation within the community and nationally. Rothman Institute sets aside resources for a significant marketing budget. "When we go into different communities or enter into alliances with health systems and hospitals, we want people to know we are there," says Dr. Albert. "It's helpful to have the brand circulated in the media, such as in newspapers or on the Internet." He also encourages Rothman Institute physicians to hold educational events and attend community events to spread practice awareness.
Beyond marketing to the patient base, it's also important for physicians to be recognized by their peers. One way to accomplish this is by engaging in academic research, publishing papers and attending professional conferences and meetings. "We think it's really important for our physicians to be as academic as possible," says Dr. Albert. "Our physicians speak nationally to other professionals. It helps differentiate our center as having really good surgeons who are also academically interested and full of knowledge about orthopedics."
6. Strategically recruit new physicians. Recruiting new physician partners from channels you know will provide you with the best quality physicians. If you participate in a fellowship program, recruit those physicians after they complete their training. You can also look outward for physicians with great reputations, such as those who already have busy practices in the community, or other academically oriented physicians from around the country. Search for physicians who trained in great programs, says Dr. Albert, and make sure they will fit with the practice's goals and values.
Learn more about Rothman Institute.
Read other coverage on orthopedic practice management:
- 4 Tactics to Maximize Orthopedic Practice Profits
- 6 Best Practices to Create a Thriving Orthopedic Practice
- 6 Challenges for Orthopedic Physician Practice Leaders and How to Overcome Them